Macy’s announced plans this morning to close 100 stores in early 2017.
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Macy’s singled out the move toward online shopping and the decline of visits to department stores. Macy’s stores are anchors at some of the region’s most prominent malls.
Macy’s now operates 728 outlets, including 675 full-line locations.
The company did not identify which stores it will close and said some may remain open past this year depending on their current lease expirations.
“This country is overstored given evolving customer shopping habits”, Macy’s Chief Financial Officer Karen Hoguet said during a call with analysts discussing the company’s second-quarter financial results. Annual net sales at the stores Macy’s plans to close were estimated at $1 billion.
Thursday’s announcement was paired with an earnings report in which the company reported second-quarter sales of $5.866 billion – a 3.9 percent drop compared to the same period a year ago.
Past remarks by Macy’s officials suggest the downtown Minneapolis store would likely survive, said Steve Cramer, president and CEO of the Minneapolis Downtown Council.
It is unclear, at this time, however which stores will close.
Manning said Shell Chemicals coming to the area could mean everything for the mall, which is now for sale. “Macy’s first-ever “Black Friday in July” event was a terrific success which drove record store and online sales for a mid-year period”.
The company posted earnings of $11 million, or 3 cents per share, compared with $217 million, or 64 cents, made in the second quarter of 2015 because of the cost associated with store closings.
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The 100 closures, about 15 percent of Macy’s 675 full-line locations, are only the latest round of closures Macy’s has done in recent years to cast off stores where profitability has waned. Excluding charges related to store closings, the company earned 51 cents, which is above the 48 cents estimate from FactSet. Analysts had expected earnings of 45 cents a share on $5.75 billion in revenue, according to a consensus estimate from Thomson Reuters.
